KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives
exchange ended 3.9% lower Monday, hitting their lowest levels in more than 15
weeks on heavy speculative selling - later recovering on supportive export
numbers.

  Exporters said they expected fresh buying interest in the cash market after
the latest fall in prices.

  Traders mostly took their lead from a continuing slump in soyoil prices in
part due to anticipated higher Argentine exports after Argentina repealed a tax
increase on soybeans and soyoil Friday following the tax's rejection by the
country's Senate.

  The benchmark October contract on the Bursa Malaysia Derivatives ended MYR132
lower at MYR3,260 a metric ton.

  October CPO futures fell below two crucial psychological marks of
MYR3,300/ton and MYR3,200/ton in the morning session and reached a low of
MYR3,197/ton, a level not seen since April 2.

  Initially, even a turnaround in Malaysia's palm oil exports failed to provide
support. Exports are estimated 11.5% higher on month during the July 1-20
period compared with a 7.8% fall during the July 1-15 period, according to
cargo surveyor Intertek Agri Services.

  Another surveyor, SGS (Malaysia) Bhd., estimated the numbers at 5.3% higher
on month compared with a 19.2% decline during the July 1-15 period.

  According to the SGS estimates, Malaysia shipped out close to 310,000 tons in
the physical market over the last five days.

  In CPO futures on BMD, traders who sold short covered their positions later
in the day, traders said.

  "There has been quick selling and buying in intraday trade leading to wide
fluctuation in prices," said a broker in Kuala Lumpur.

  December soyoil on the Chicago Board of Trade tumbled 138 points Friday to
63.50 cents/pound.

  At 1036 GMT, December soyoil on e-CBOT was trading another 59 points lower at
62.91 cents.

  "The revocation of Argentina's hike in export tax and weakness in soyoil
prices has led to selling pressure on BMD CPO futures," said an analyst in
Singapore.

  Vegetable oil fundamentals dictated some of the selling, but speculators have
added most of the pressure, said a trader in Kuala Lumpur. While fundamentals
warranted a downward adjustment, the price correction was overdone, he said.

  The revocation of the soybean and soyoil tax hike will likely end a
4-month-long imbroglio that led to a series of strikes by growers protesting
the tax and a growing stockpile of soybeans.

  "The strikes in Argentina supported CPO prices over the last few months, and
now the end of the stalemate is bearish - at least for the near term," said a
Kuala Lumpur-based executive at a global trading company.

  CPO trading volume on the BMD was lower, at 15,047 lots from 16,501 lots
Friday. Open interest stood at 57,250 lots, up from 53,396 lots. One lot
comprises 25 tons.

  Cash palm olein for October/November/December traded at $1,132.50/ton, said a
Singapore-based trader.

  Cash CPO for prompt shipment was last offered MYR140 lower at MYR3,280/ton.

   (Closing BMD CPO futures prices in MYR/ton at 1000 GMT)

Month      Close    Previous    Change    High     Low
Aug 08     3,245    3,380       Dn 135    3,318    3,200
Sep 08     3,245    3,387       Dn 142    3,330    3,201
Oct 08     3,260    3,392       Dn 132    3,335    3,197
Nov 08     3,262    3,391       Dn 129    3,340    3,200